Question: 4. [20 points] So far we have assumed that these taxes are just wasted. Now let us assume that government spending is actually part of

4. [20 points] So far we have assumed that these taxes are just wasted. Now let us assume that government spending is actually part of the production function. Y = AKaLG'la. Also, assume that the gOvernment runs a balanced budget and uses only one tax, which is levied on output (at rate 7' per unit output). Also assume a 6 (0,1), ,8 6 (0,1) and or + [3

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Population

The feeling of boredom.

2. In this chapter, the reader should reflect on the following concepts: